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February 24, 2011

Libya Turned Down Madoff, Stanford Proposals: Wikileaks

Libyan investments were sought for Ponzi scheme, but declined

Wikileaks strikes again. This time a leaked cable reveals, according to a Wednesday MSNBC news report, that the regime of Libyan leader Muammar Ghaddafi was approached for the purpose of soliciting investments by both Bernard Madoff and Allen Stanford. Madoff has already been jailed for perpetrating a multibillion-dollar Ponzi scheme that cost investors dearly; Stanford is awaiting trial on similar charges.

The report said that Mohamed Layas, head of Libya’s sovereign wealth fund LIA, said in a meeting with U.S. Ambassador Gene Cretz that he had been approached by both men with the offer of investments. In the cable, titled "Technology of Tourism: Head of Libyan Investment Authority Discusses Opportunities for US Business in Libya," and written on Jan. 28, 2010, in the meeting with Cretz, Layas denied reports that LIA had invested $100 million with Stanford.

Cretz had written, "Stanford had approached the LIA in the middle of his crisis, offering a 7-8% share in his investment scheme, but Layas had refused. Layas also mentioned having been previously approached by Bernard Madoff about an investment opportunity, 'but we did not accept.’ "

Layas had also revealed during the meeting that LIA held $32 billion in liquidity, and that amounts of $300 million to $500 million were held and managed by several American banks. However, Cretz also said that Layas noted a preference for doing business in London, where LIA has an office, thanks to the "ease of doing business" there and also because of the relatively "uncomplicated tax system."

Layas, according to the cable, also complained about Libyan funds "mismanaged" by Lehman Brothers. The full text of the cable is available at the Telegraph.